Suncorp : 2016 AGM CEO's Address

22 September 2016

Good afternoon and welcome to the 2016 Suncorp AGM. It's certainly been a big year, much has been achieved, and I'm pleased to report on the progress we are making.

My time on the Board before becoming CEO gave me great insight into the opportunities and challenges that the organisation faces.

Suncorp has strong foundations - a large base of customers, many trusted and valuable brands, excellent technology and a strong balance sheet. The Group also has a high performance culture and industry-leading people.

Like every industry, there are headwinds that challenge our business. These include factors beyond our control including volatile investment markets, frequent and severe natural hazards, increasing Government regulation and ongoing competitive pressures.

In response, we are building a more resilient Suncorp.

This is reflected in three key priorities - maintaining momentum and stability, elevating the customer, and recalibrating costs.

In terms of maintaining momentum and stability, we finished the year in good shape delivering a full year net profit after tax of $1,038 million.

The Insurance business achieved a net profit after tax of $624 million

- a solid result given the lower investment returns and higher claims costs. We were able to partially offset the impact of these with reserve releases arising from low inflation.

It was however, disappointing to report an increase in the cost of working claims at the end of last year. Fixing this remains my number one priority. The initiatives we have put in place are delivering improved operational metrics which are now translating into lower claims costs.

To further build resilience of the organisation, we have purchased additional reinsurance cover to protect against the impact of increased natural hazards that we may experience.

Suncorp Bank delivered a strong result with the net profit after tax of

$393 million, up 11% on the previous year, and Suncorp Life improved its net profit after tax by 14% to $142 million.

The New Zealand business contributed $182 million in net profit after tax to the Group.

It is pleasing to see top line growth of 2.9% across the Group, with all key business lines delivering.

During the year, a number of Suncorp people were recruited by our competitors, highlighting the quality of our people and the current high demand for talent.

Yesterday, we announced some further additions to our senior team and I am confident we are well resourced for the future.

Turning to my second priority - Elevating the Customer. As you know, Suncorp has a large customer base, however our structure has made it difficult for us to view customers across brands and products. As a result, the value we deliver tends to be price driven, and this is not sustainable.

So in February, I announced a new operating model that removed these constraints. We also eliminated some areas of duplication that existed. We have reorganised the entire business to support our priorities which will enable us to broaden and deepen our relationships with our customers.

The 'One Suncorp' business model will allow us to better meet our customers' needs across brands and lines of business.